The encryption market is going through a difficult period, and no one can deny this. There was some optimism at the beginning of last year, but now investors are more cautious in allocating assets. This applies to retail investors and institutional investors. As both have been hit hard by the cold winter of encryption, prudent investment methods are promoting the development of the encryption market in different directions. The cryptocurrency market is experiencing an Internet foam similar to that in 2000, and 2023 will be an obvious manifestation of this. However, this cryptocurrency winter has seen some positive trends, leading us to the cryptocurrency spring. What is the trend of cryptocurrencies in 2023? How to plan cryptocurrency investment in 2023? Next, let's have a look.
What is the trend of cryptocurrency in 2023?
1、 Care about social undertakings
One of the main trends impacting the market is that investors are turning to more socially conscious projects. The key example in this regard is IMPT, which is essentially a carbon credit platform project. IMPT is building a fragmented platform where stakeholders can purchase IMPT currency to purchase carbon credit lines. One carbon credit is equivalent to one ton of carbon emissions, and tokens can also be obtained by participating in various activities in the ecosystem. If the carbon credit line is burned, the combustor will receive an NFT. Later, NFT can be owned as a collection or sold in NFT markets such as OpenSea or Rarib.
2、 Turn into more reliable property
In the turbulent stage or period when the market is severely bearish, investors turn to safer property. In the encryption industry, either a stable currency or a BTC, which always tries to bounce back, has proven itself again and again after many crashes. BTC will continue to lead the market recovery. Investors will be concerned about the assets that have shown their reliability over the years, and there is no better choice than BTC. Ether will also become a strong asset, because it has such strong influence in the DeFi industry.
3、 Better social participation in Metaverse
Metaverse is still the main trend of the market, but it lacks a strong social foundation. Robot Era tries to change this situation and may set the tone for 2023. This is a meta universe with the theme of future robots, and the players are robots. The universe is highly social. Players can participate in concerts, gambling halls and salons while interacting with others. They can also build their own interactive social experience without any numbering knowledge. This is an exciting way to encourage players to create interesting experiences they like - and get paid for them.
4、 Stable currency becomes more prominent
The stable currency is the foundation of the DeFi field. As capital flows into more lasting assets, it also plays a very important role in turbulent times. This may last until 2023, when investors are not sure where the market may go. When we do not invest in one of the situations described here, market participants will undoubtedly deposit their cryptocurrency assets in the popular stable currency. Concern about these capital flow methods will enable investors to better understand what new currencies are being tested by more experienced participants.
How to plan cryptocurrency investment in 2023?
First of all, there are key risks worth considering before investing in this field.
Macroeconomic risks
With the arrival of 2023, investors must be aware of the macro and systemic risks affecting the encryption industry. The war in Ukraine caused the energy problem caused by the sanctions on Russian energy. The Federal Reserve's fiscal policy response to inflation continued to disrupt the market. The proliferation of cryptocurrency brought about by the recent bankruptcy continues to bring volatility to the market, and the pressure of control and surrender of miners may continue to the new year.
Ukraine war, inflation and interest rate rise
The economic impact of the war in Ukraine affected the economy. Russia is one of the largest energy sources - especially for Europe - the sanctions on Russian energy have caused difficulties in several European countries, with high prices and low supply.
The economic suspension policies implemented by governments in response to the COVID-19 pandemic - accompanied by the massive expansion of the money supply - caused inflation to soar in the United States, Europe and other regions.
Central banks are trying to solve the inflation problem by raising interest rates, which will bring downward pressure on the stock market and cryptocurrency prices throughout 2022. The war in Ukraine may escalate, inflation and interest rates will continue to rise, which may bring more pain to investors in 2023.
Cryptographic infection
The contagion effect caused by Terra crash last May still plagued the encryption market. The failure of FTX in November brought BTC to the bottom again. The waves caused by these major events have not subsided.
Many companies have declared bankruptcy. When they seek to repay the debtor, they may settle their encryption assets, which may lead to a new round of sales in the encryption market. Investors should pay attention to this when entering the new year.
Control pressure
Encryption regulations have been in the United States for some time. Dramatic events in 2022 will only increase the probability of management and control promotion in 2023.
In the long run, the clear performance of regulation helps to encrypt space by attracting organizational assets. However, the centralized agreement, stable currency and centralized exchange may experience a subversive stage in the short term. If the popular stable currency such as TEDA, TEDA $1.00 or USD coin (USDC), is subject to control and inspection, it may cause market turbulence.
The miners surrendered
If Bitcoin continues to fall, the pressure on miners will increase. BTC is a capital intensive business, and the falling price makes it impossible for these businesses to operate continuously. As a result, miners were forced to sell BTC to pay for the cost, bringing downward pressure on prices.
When selecting layer 1 and layer 2 blockchains, it is wise to provide a reserved investment option for each key option. For example, when someone likes Solana, they may want to hedge themselves by investing a small amount of assets in the so-called "Solana killer" Aptos.
In short, Aptos is to Solana what Solana is to Ethereum. Such figure investment also helps to establish a stable and balanced portfolio.
Airdrop
It is hard to forget the Ethereum Name Service (ENS) and ApeCoin$ 3.61 Air drop in the last cycle and its recent Aptos (APT) air drop. Web3 space is full of new and generally trusted projects. The project must have a large group of people to test their goods. Investors can participate in the project as soon as possible so that their qualifications can be air dropped when the currency is announced.
The DeFi project on Ethereum was widely used in the last cycle. There is no reason to think this will not be the case. 2023 is expected to be a year when many new projects are being tested.
Historical Rhyme
There were many exponential gain modes in the last cycle. Note similar topics in this cycle. The ENS domain name was very popular in the last cycle. As decentralized name services become more and more popular, it may be worthwhile to focus on developing your own projects.
DeFi performed well in the last cycle. GameFi and yuan currency also performed well. DeFi and GameFi are likely to become the next big event in the next few years.
In the past few months, SocialFi has taken off and several promising projects have emerged. This may be another opportunity similar to ENS in the next cycle.
The meme had some luck in the last cycle, and the dog coin of $0.08, supported by Elon Mask, is still an interesting project. However, caution is required before investing in meme currencies.
Follow smart money
This rule of thumb is not always effective, but it can pass moderate due diligence. Investment selection of venture capital funds that deserve attention, such as a16z, Sequoia Capital, Solana Ventures, Coinbase Ventures, etc.
They do not always make the right choice, but their portfolio will be a good starting point and refined into some good investment candidates. However, after the encryption market bottoms out and recovers due to the prediction of the next bull market, it is generally wiser to invest as a new name for network layer projects.
There is no trick to getting millions of dollars in the encryption industry. The general way is to throw high and suck low. Therefore, 2023 is not a bad starting opportunity, because the price is very low.
In addition, time spent in the market is better than time spent in the market. The longer investors stay in the market and follow basic standards as much as possible, the higher their returns will be. Despite market cycles and fluctuations, cryptocurrencies and generally linear markets, diligent investment strategies should be conducive to generating positive returns.
Speaking of this, I believe you have a certain understanding of the trend of cryptocurrency in 2023 and how to plan cryptocurrency investment in 2023. In general, the editor here also reminds investors that the currency circle market is volatile and unpredictable, and investment is accompanied by certain risks. You must have a comprehensive understanding before entering the market, and do not invest blindly.
